Group Project

Report on
“Active Fine Chemicals Ltd”
MGT330: Designing Effective Organizations
Section: 1
Submitted To

Dr. Ummaha Hazra

Assistant Professor

Department of Management

North South University

Submitted By:

Name ID
SaminYasar 1620224030
Mehedi Hassan 1610933030
Ashfaq Ahmed Asif 1530667630
S.M.Zulkarnain 1520283030

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 TABLE OF CONTENTS

CONTENT PAGE NO
Executive Summary 3
Organizational Profile 4-5
Organizational Structure 6-10
Future Redesign 11-16
Conclusion 16
References 17

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 EXECUTIVE SUMMARY
This report is basically prepared on Active Fine Chemicals Ltd which is an emerging
pharmaceutical company .We have identified their structural design flaws which includes
centralized decision making ,vertical communication, hierarchical problem, professional
bureaucracy .After analyzing all their problems we have suggested some solutions like ,they can
reorganize their structure into hybrid structure ,they can add boundary spanning roles .Our
suggestions also include establishing horizontal relationship using liaison roles tool. We have
also suggested them to do some test which will help them to check whether their organization
have well designed structure or not.

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 ORGANIZATIONAL PROFILE

.INDUSTRY-Active fine chemicals is basically a pharmaceutical and they started their business
with a motive to bring a remarkable change in the health sector .They are emerging slowly but
want to establish themselves as an original R&D driven organization . The organization has
achieved license from the directorate of drug administration of Bangladesh to work as a
manufacturer of biological & other special product. The main driving force of the company is the
opportunity to serve a quickly growing pharmaceutical sector of the country which is largely
import dependent for its raw materials. Their goal is to provide highest quality materials at a very
competitive price.

MISSION: They are looking forward to strengthen the pharmaceutical sector of Bangladesh by
producing top class raw materials with a competitive price.

VISION: To be the leader in the sector of Active Pharmaceutical Ingredients (API) and
Laboratory Reagent Manufacturing Industry.

TYPE OF BUSINESS- Active Fines Chemical Ltd is best known for their raw materials. Apart
from providing raw materials they have their own pharmaceutical products .Their product
category includes Active Pharmaceutical Ingredient (API), Solid Reagent, Solvent. Their
operating years is short compared to other pharmaceutical companies in the industry but in this
short period they were able to established themselves as one of the best companies .

NUMBER OF YEARS-Active Fine Chemicals Limited was found back in 2004. The company
officially started their journey on 1st January 2004. They started their company with a vision of
producing the bulk drugs and reagents. After 5 years the company was converted to "Public"
limited company on 9th December, 2009

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LOCATION- Their corporate office is situated in 214/D, Navana Osman @ Link, Bir Uttam
Mir Shawkat Sarak, Dhaka 1208 . And their factory is situated in Munshiganj which is 60 km
away from their corporate office .

NUMBER OF EMPLOYEES-They have 2000 employee including 1500 working in the

factory. The top level management consists of 6 members which includes chairman, managing
director ,CFO,CEO,CMO,HR Head .They have 80 middle level managers which includes
different assistant managers and executives .Administrative support are given by 200 employees
For different technical support they have 20 employee .They have 94 sales representatives in the
sales team

COMPETITON- They have huge number of competitors in Bangladesh .As Bangladesh is

largely booming in the pharmaceutical areas. Their notable competitors are Incepta
Pharmaceuticals Ltd, Square Pharmaceuticals Ltd, Orion Pharmaceuticals Limited, Apex
Pharmaceuticals Ltd, Acme Pharmaceuticals Ltd. Despite of having large number of competitors
in the industry Active Fines Chemicals Ltd are still have a good number of market share and the
acceptance of their products among the customers are really high because of their quality and
competitive price .

ORGANIZATIONAL DIVERSITY-Company bosses are always trying to find better ways to

attract the consumers, dealers and increase sales. Diversity is a very productive way to draw new
employees who brings a wide range of ideas, perspective and problem-solving skills. Diversity
helps a company to accomplish their targets.

According to the deputy manager, diversity is doing an important in their company. As it is

important for the company to maintain a better organizational culture, they recruit a diverse
workforce and the leadership team is committed to diversity. They prefer gathering of people
from different backgrounds. The organization hires people from different religious group.
Religion is not a factor when it comes to performance. When a group of people are celebrating
their religious festival the other religious group will continue their organizational duty on behalf
them. This is how diversity is helping the organization in terms of better understanding and &
identifying opportunities.

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 ORGANIZATIONAL STRUCTURE

CHAIRMAN

HR
CFO CEO CMO
HEAD

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

MANAGERS MANAGERS MANAGERS MANAGERS

EXECUTIVES EXECUTIVES EXECUTIVES EXECUTIVES

Active Fine Chemicals Ltd mainly follows functional group structure .They have four
departments which are operated by the CXO and the department managers .The departments are
as follows-

1) Human Resource

2) Marketing

3) Finance and Accounting

4) Research and Development

HUMAN RESOURCE –This is the heart of all the departments because the main responsibility
lies on this department. Selecting the right person for the right department is one of the crucial
work .Starting from the selection and recruitment process it also includes giving proper training
to the employee. As it is a pharmaceutical company they need to select people keeping each and
every simple matter into considerations

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MARKETING –This department is inevitable for both the service and the manufacturing
company .As Active Fine Ltd is a local drugs manufacturing company their marketing team need
to be strong in order to compete with the other pharmaceuticals company

FINANCE AND ACCOUNTING –The finance and accounting department of active fine is
very transparent. They do both annual internal audit and external audit .Everyone has access to
their annual financial report

RESEARCH AND DEVELOPMENT –The most important department among all the
departments .As Active Fine Ltd is drug manufacturing department they need to research a lot
and have to come up with new idea in every single moment

Professional Bureaucracy

After our interview session we have analyzed that the structure of Active Fine Chemicals can be
easily relatable to Professional Bureaucracy of Mintzberg`s Organizational Type. In Active Fine
Chemicals Ltd the top management has 6 members which includes the chairman ,managing
director ,CFO,CEO.CMO,HR Head. The middle level consists about 80 managers including the
executives.94 sales representatives are working in the field. For the technical support they have
20 members who take care of the machineries ,electrical equipments .200 staffs are there for
their administrative support .And in the technical core they have 1500 workers .

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We discovered that Active Fines Ltd is a mechanistic organization after analyzing their
communication, decision making, hierarchy system.

COMMUNICATION –They have vertical way of communication. The middle level employee
are not allowed to take a single decision without the consent of the top management. For every
single details they have to take permission from the top management.

CENTRALIZED DECISION MAKING –All the decisions are taken by the top management
.Middle level manager and the lower level just execute those decisions. Though the system
should be opposite because it is a drug manufacturing and they have to research a lot and the
team should be allowed to do that without any interference

HIERARCHY – All the employees of Active Fine Ltd have to maintain a strict hierarchy. The
executives cannot make a decision .Even in any kind of emergency situation they have go
through their strict hierarchy process .

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If we analyze their environmental uncertainty Active Fines Ltd falls under Complex plus Stable
framework where the uncertainty is moderate. The external elements are large because there are
many pharmaceuticals company like them but every company has different product category.
The elements remain the same or change slowly means the medicines for a disease generally
remain same. In terms of their responses it matches with their external environment. From the
organizational design structure it is observed that it also falls under Low Moderate Uncertainty
.Their structure is vey mechanistic. They have many layers in between starting from the
executives to the top management and the decisions are always centralized. Their department
numbers are huge as they have variation in their product line but the integrating roles are very
few .They took immediate decision and then send it for execution instead of doing vast research
and planning.

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According to the Framework of Departmental technologies if we analyze Active Fine Chemicals
Ltd. It will fall under Routine Technology .It is really surprising that being a pharmaceutical
company how they fall under Routine Technology but after our interview we realized that they
do very formal and routine work every day .Even their R&D department which is most important
for a pharmaceutical manufacturing company also don`t do much research .The reason behind it
the top management do not allocate them the required budget and also not motivate them to go
for new inventions.

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 FUTURE REDESIGN
After interviewing the manager, we felt that the current structure of the company is not suitable
in the long run. As their production and both product lines are increasing So, hybrid structure can
be implemented to reorganize the company.

OUR FIRST SUGGESTION: HYBRID STRUCTURE

Hybrid Structure is basically the combinations of many structures which includes divisional,
functional, geographic, horizontal or network structures in order to response to the strategic
needs. They combine to take the advantage of the strengths and to avoid weakness .They tend to
be used in rapid changing environment because they have greater space of flexibility. One type
of popular hybrid structure is the combination of functional and divisional structures .When the
company grows large and their products or markets are also growing they divided themselves
into self contained divisions of some type. The important functions of each products or markets
are decentralized to each self contained units. Some functions those require great economies of
scale and high specialization like the Finance ,HR , Legal can be centralized at headquarters.
Active Fine Chemicals Ltd should reorganize themselves into hybrid structure in order to more
responsive to the market. Their three major product category Active Pharmaceutical Ingredient,
Solvent,Solid Reagent each of them are serving a different purpose and following different
management style should be headed by a vice chairman.

Functions that are important to each product or market are decentralized to the self-contained
units. However, some functions that are relatively stable and require economies of scale and in-
depth specialization are also centralized at headquarters. Active fine chemicals can reorganized
themselves into hybrid structure in order to be more responsive to the changes .Three major
product category can be created and each of the category will be headed by one vice chairman.
He will be responsible for all the functional product like Marketing, Manufacturing, Planning
,Supply and distribution. Other functional departments like HR, Technology, Finance will be
centralized. They will provide service to the entire organization from the center

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 Chairman

CFO CEO CMO HR Head

API Solvent Solid Reagent

Vice Chairman Vice Chairman Vice Chairman

Functional Structure Product Structure

HYBRID STRUCTURE

HOW THIS STRUCTURE IS GOING TO HELP

When they will have a separate vice chairman for each product which will be directly under
chairman .They will get the solutions of the following problems

COMMUNICATION : The communication gap will be removed ,they can easily get the
solution of any problems as there will be less communication barrier and the feedback from both
way will be more smooth .As they will be going to have two structure so no particular
department have to dependant fully on other department .

THE R&D DEPARTMENT WILL GET MORE FREEDOM: As this type of company is
totally dependent on the R& D so they should get enough flexibility to do more research and

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develop new products .As Active Fine Chemicals Ltd is following fully mechanistic
organizational structure .The R& D is not allowed to do enough research and at the same time
the department are also not allotted required budget to do research but when the company will
reorganized into a hybrid structure each and every department will get enough flexibility for
working.

CENTRALIZED DECISION MAKING: Active Fine Chemicals Ltd currently having a

centralized decision making process which is one of the main obstacles for any company to grow
bigger. This hybrid structure will remove centralized decision making and will make the office
environment more friendly.

OUR SECOND SUGGESTION: BOUNDARY SPANNING

ROLES
Boundary spanning roles refers to the communication with individuals and groups outside the
organization to achieve valuable information to help the information process. It gives an
organization the capability to grow by achieving knowledge from external forces. As AFCL is
following is centralized structure for a long time, they should look for a change for improvement.
For getting the benefits of boundary spanning roles: they should follow these

INFORMAL COMMUNICATION: Formal communication is slow, in modern world it will

only create obstacles. By using informal communication like phone, mobile, email, social media
it will be really easy communication among the organization members. They will be able to
transfer information will able to take decisions quickly & most importantly it will reduce the
communication gap between higher authority and middle level employees. Moreover as they are
pharmaceutical company which is totally based on R&D so in order to have good relations with
the marketing and manufacturing department. And this will help to response in a emergency
situation immediately

INDUSTRY INSIGHT: As it is a research base organization the top level must make sure that
they have proper knowledge of industry Insight. Boundary spanning will help to reduce the gap
between factory workers and office employees. During our interview session we observed that

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the most of the executive level employee do not have any clear idea about the market share of the
product and also about the basic knowledge about the product .

COST: Boundary spanning will surely reduce the organizations cost. Formal communication is a
great way of reducing cost. Calls and text will cost much less than formal communication like
going meet the individual in person. Employees can do the job by sitting in their office.

SAVING TIME: Time is a massive asset but it can be a issue if the organization don't use it
properly. By spanning roles it will surely save time as higher authority have industry knowledge
which will help them taking decisions quickly, as communication is informal the employees and
workers will be able sent emergency information whenever they need.

HELP TO KNOW MORE ABOUT THE EXTERNAL FORCES: As boundary roles also
create relation with the external forces in the environment. So it will be easy for Active Fine
Chemicals Ltd to know more about their competitors and they can take the competitive
advantage .Not only about the competitors it will also help to know about their customer`s
demand ,about the market share ,what kind of products are more preferred by the customers.

SOME MORE SUGGESTIONS

ESTABLISHING HORIZONTAL INFORMATION SHARING : As we have noticed Active
Fine Chemicals Ltd currently having vertical information sharing which is creates both internal
and external problems so in order to develop their company and to establish themselves as brand
leader they should go for horizontal information sharing .Different tools are there for horizontal
information sharing but as this is a manufacturing company and specially based on R&D they
should use Liaison Roles .

LIAISON ROLES-Liaison Roles basically works between engineering department and

manufacturing department .Engineering department develop and test a product .Here R&D is
indicated as engineering department as they are developing new products and testing it
.Manufacturing department produce that product in large amount. Liaison Roles help to keep a
good coordination between both the departments because R&D have to know first that the
product that they are going to develop whether the manufacturing department have the capability

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to produce that or not. If a product is developed which is not possible for the manufacturing
department to produce then it is a loss for the company.

Some Tests are Given Below Which Active Fine Chemical Ltd should do to check whether their
organization is well designed or not

1)THE MARKET ADVANTAGE TEST : When a company enters into a new market they
should follow two strategy i)Which market they are competing in and ii) How they will gain
advantage over their competitor . Failing to follow any one of the strategy will not allow the
company to be successful

2)THE PARENTING ADVANTAGE TEST : The way parents take care of the family
members ,it is to be checked that the company head quarter is taking care of the corporate office
and the factory .

3)THE PEOPLE TEST: When an organization fails, everyone blames the people working in it
but it has to be checked that whether the organization designed is support the people working in
it .Whether it is helping the people to increase their skills or supporting their creativity .

4)THE FEASIBILITY TEST :There are both external and internal constraints in an
organization .Internal constraint includes informational systems and external includes different
laws and regulations imposed by the government .Feasibility test actually suggest that preventive
measures should take beforehand in order to avoid those constraints.

5)THE SPECIALISTS CULTURES TEST: Some department of an organization have

different cultures. They need to think beyond from their existing organizational norms which
includes the new product development, e-business group, functional units. And the organization
have to ensure that they are getting sufficient support from the rest of the organization.

6)THE DIFFICULT LINK TESTS: This test indicates that whether the intra relationship
among the departments are cooperative or not. The top management should not interfere when
problems arises among the departments rather they should allow them to dispute the problem
among themselves

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7)THE REDUNDANT-HIERARCHY TEST: Whether the company has many parent levels or
many units This test actually help to solve if there are many layers in the organization .Many
layers in the organization actually creates barrier in the communication.

8)THE ACCOUNTABILITY TEST: The organization which is based on decentralized

decision making this test is much essential for that type of organization .Because this type of
organization has greater amount of flexibility. This test is required to ensure that the
management has proper control.

9)THE FLEXIBILITY TEST: The employees in an organization should give proper flexibility
to develop new strategy and to adapt with the change .As business environment is changing
continuously the organization should be flexible enough to bring changes .This test is necessary
to check whether the organization is flexible enough or not .

CONCLUSION
In the end it can be said that we have identified the company`s structural design .Analyzed their
flaws in the design and suggested some future redesign structure .We believe that if Active Fine
Chemicals Ltd take our suggestion into account then their current problem occurring due to the
structural design will be solved and this will also help them to grow bigger within shortest
possible time.

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 REFERENCES

AFC Chemical - A trusted manufacturer of API and Fine Chemicals in Bangladesh. (2018). Retrieved from
http://www.afchem.com

Goold, M., & Campbell, A. (2002). Do you have a well-designed organization?. IEEE Engineering
Management Review, 30(3), 38-38. doi: 10.1109/emr.2002.1032395

Uddin, A. (2018). Organizational Analysis [In person]. Link Road,Dhaka.

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